Italy's 5-Star sets ultimatum to League amid government gridlock

ROME (Reuters) - The anti-establishment 5-Star Movement on Wednesday challenged the far-right League to abandon its electoral allies by the end of this week and form a joint government, as talks to end Italy’s post-election deadlock floundered.

Italian President Sergio Mattarella speaks with new elected Senate president Maria Elisabetta Alberti Casellati at the Quirinale palace in Rome, Italy, April 18, 2018. Italian Presidential Press Office/Handout via REUTERS

The call from 5-Star leader Luigi Di Maio came after President Sergio Mattarella asked the head of the upper house Senate to meet bickering party leaders to see if she could break the stalemate following last month’s inconclusive ballot.

A coalition made up of 5-Star and the League would likely alarm Brussels and financial markets. Both are hostile to EU budget rules and the anti-immigration League also wants to leave the euro zone as soon as it is politically feasible.

“5-Star is ready to sign a government contract with the League and not with all the centre right,” Di Maio told reporters after meeting Senate speaker Maria Casellati.

Di Maio set a tight deadline for League leader Matteo Salvini to abandon his electoral partner, former prime minister Silvio Berlusconi, something Salvini has so far refused to do.

“I say clearly to Matteo Salvini that there is no time left, he must take a decision this week,” Di Maio said, without specifying what would happen if the ultimatum passed.

The euro zone’s third-largest economy has been under a caretaker government since the March 4 election, when 5-Star and the League were the big winners at the expense of mainstream groups. However, no one party or bloc won a clear majority.

Mattarella asked Casellati to report back to him on Friday after exploring the scope for a deal between Berlusconi and Salvini’s conservative alliance, which won most seats at the election, and 5-Star which emerged as the largest single party.

Casellati, 71, is a senior member of Berlusconi’s Forza Italia (Go Italy!) party and is close to the veteran leader.

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5-Star, which bases its appeal on a promise to clean up politics, refuses to countenance a deal with the 81-year-old media billionaire who has a conviction for tax fraud and is on trial for bribing witnesses - a charge he denies.

Salvini dispatched his closest aide, Giancarlo Giorgetti, to see Casellati and he showed no sign of bowing to 5-Star’s demands. Instead he called on Di Maio to drop his veto against Berlusconi and to give up his claim to be named prime minister.

“If these vetoes were to fall by the wayside in the coming hours ... then we would be ready to get a government going, even next week,” Giorgetti said.

ROLE FOR PD?

Mattarella turned to Casellati after holding two rounds of fruitless consultations with the various parties himself.

If her efforts also fail, pressure will grow on Salvini to break with Berlusconi and attention will also turn to the centre-left Democratic Party (PD), which has governed for the last five years and lost badly in last month’s ballot.

The PD has said it plans to go into opposition and has rejected appeals from 5-Star to discuss a possible coalition.

However, that determination may be waning. On Tuesday the PD’s interim leader Maurizio Martina said the party wanted to discuss concrete proposals with whoever was given a mandate to form a government.

The proposals, centred on tackling poverty and increasing welfare, were close to the kind of policies espoused by 5-Star and were widely seen as indicating a willingness to negotiate with the party founded in 2009 by comedian Beppe Grillo.

However, the situation remains extremely fluid, partly because the PD is internally split between those openly advocating a deal with 5-Star and others, led by its former leader Matteo Renzi, who have ruled it out.

If all efforts to break the stalemate fail, Mattarella would have to call new elections, almost certainly in the autumn.

The 45 days since the election are far from being Italy’s longest post-vote stalemate. At the last election in 2013, 62 days passed between the ballot and the creation of a government.